News / Analysis
Finance Update – Quiet Before the Storm?June 30, 2020
Asia – HK Security Laws Enacted
As China’s parliament unanimously passes Hong Kong’s security laws, Asian indices are positive this morning, Australia, New Zealand, and the Shenzhen Composite, adding nearly 2%, the Hang Seng 0.64% and the Nikkei 1.61%.
China’s manufacturing PMI in June improved by 3 ticks to 50.9, the non-manufacturing figure up a point to 54.4.
The Renminbi overnight jumped 3 cents on the Yuan as the World Bank Interbank Financial Telecommunications Association (SWIFT) reports that the currency is now one of the top-6 most used currencies in the world.
Leaprate informs us that more and more countries are “initiating RMB settlement business”, with China increasing its gold reserves while continuing to test its digital e-RMB.
In recession-trapped Japan, unemployment increased by 3/10 to 2.9% – a 3-year high – while the preliminary industrial production reading contracted for the 4th month in a row by a fearful 25.9% YoY in May – double the expected – both pushing the Yen down by 0.06%.
Australian central banker Guy Debelle this morning said that the national economy is in dire need of continued government stimulus – now at an unprecedented 10% of GDP, one of the highest in the world.
The NZD is up a tenth this morning after business confidence improved in June to -34.4, and the ANZ’s activity outlook climbed to -25.9.
Europe – Getting Better, but Not Enough
European indices were all green upon closing yesterday, the Dax up by 1.18%, the FTSE 1.01, and the CAC40 073%.
The Euro is flat this morning after services, industry, and economic sentiment figures, though improving, failed to meet the mark. German CPIs improved nicely, as did Spain’s.
Britain’s consumer credit deteriorated beyond expectations in May to £-4.597 bn with mortgage approvals down to 9.27 K. Reuters, however, reports that business confidence rose by 3% to a 3-month high of -30.
Americas – Admin Blocks Infrastructure Bill
The dollar too is flat after an improvement in pending home sales in May – they contracted by 5.1% YoY, after expectations were for a 44.6% contraction.
Fed head Powell yesterday said that the US economy is “extraordinarily uncertain”, output and employment still severely stymied.
Meanwhile, the White House has rejected a House bill to devote $1.5 tn to infrastructure projects, this despite last year’s agreement between Trump and the democrats to spend $2 tn on said bill.
Treasury Secretary Mnuchin, on the other hand, said that the US is in a “strong position” to recover from the COVID pandemic. US indices managed to recoup some of the week’s losses, the DOW up by 2.32%, the Nasdaq half that.
Commodities – Gold in Doubt
Gold continues its week-long consolidation towards 1780.
WTI yesterday broke through its 5-day resistance at $39, nearing the $40 mark before settling at 39.50 – downward pressure supplied by demand concerns and the projected return of Libyan supplies to the market.
Corporate – FedEx Reports
Microsoft, Ford, Reebok, Adidas, Best Buy, and Twitch yesterday joined the Facebook ban, which organisers are now taking global – Twitch yesterday suspending Trump’s account. Facebook shares were up 2.11% yesterday.
Meanwhile, Amazon (-0.46%) workers in Germany have gone on strike after 11 employees tested COVID-positive.
Pepsico (+1.67%) and Broadcom (+0.77%) today pay dividends, and FedEx (+3.44%) publishes its 4th quarter earnings.
|08:00 AM GMT||Spain||GDP. PPIs at 10:00|
|09:00 AM GMT||Italy & EU||CPIs|
|12:30 PM GMT||Canada||GDP|
|01:00 PM GMT||US||Case Shiller Home Prices. Chicago PMI at 1:45, &Powell testifies at 4:30|
|08:30 PM GMT||OIL||API Crude Oil Inventories|
|11:00 PM GMT||UK||Consumer Confidence & BTC Shop Prices|
|10:30 PM GMT||Australia||Mfg Performance. PMI at 11:00, and Building Permits at 1 AM (+1)|
|10:45 PM GMT||NZ||Building Permits|
|11:50 PM GMT||Japan||Manufacturing outlook & index. PMI at 0:30, and consumer confidence at 5:00|
|01:45 AM GMT (+1)||China||Caixin Mfg PMI|